North oil may be worth trillions

by Andr? Hueber
A whopping US$38 trillion ($66 trillion) worth of oil and gas could be under the ocean off Northland's west coast, with the Government inviting overseas oil companies to find out how big the deposits are.
Oil and gas seeps off Northland's west coast have the potential to generate more than 1 trillion barrels of oil, the Ministry of Economic Development says.
Petrol companies could start setting up shop in the region after the Government announced the opening of bidding for exploration permits.
Six blocks are being offered in an area known as the Northland Basin, covering 49,496sq km. The area is "highly prospective", but under-explored. It sits beside the Taranaki Basin, which already produces gas and oil.
Satellite images have shown a large number of offshore "seeps" - where liquid from the ground oozes to the surface - indicating the presence of oil and gas.
Ministry spokeswoman Emilia Mazur said that until exploration work was done it was not possible to make a meaningful estimate of the potential.
If oil was discovered it would probably be sold overseas, helping to balance New Zealand's trade account and providing direct benefits from royalty and taxation payments to the Crown, Ms Mazur said.
"If gas is discovered, then it provides the opportunity for domestic use. Subject to size, if very large gas volumes are discovered then this opens the opportunity for larger scale use, such as LNG or petrochemicals."
Minister of Energy and Resources Gerry Brownlee said a number of major oil companies had already indicated interest in the New Zealand region.
It would take at least 4-5 years after any permits were awarded to find out if oil or gas existed in commercial quantities, and then another 10 years before the fuel reached the market.
Enterprise Northland boss Brian Roberts said Northland's lack of a commercial port on the west coast meant it might be more appealing for companies to base their explorations in New Plymouth, where assets and infrastructure were already in place. Northland helicopter companies could be used as support services though, he said.
"Depending where the field is, there's a real potential for accommodation and support services in places like Kaitaia and Dargaville, which would have access to the rig by helicopter. Restored crew will need shore-based time and there's the ability to move lightweight equipment."
Opportunities also existed for onshore engineering companies in terms of equipment maintenance, he said.
"How much Northland benefits depends on whether oil is piped onshore first or piped straight on to ships. If they build moving platforms for ships to tie to, there's no real benefit to Northland."
There was no doubt the region would notice positive side-effects but it depended on where support infrastructure was based. If oil companies were successful in their exploration, they would own the oil, Mr Roberts said. But Enterprise Northland would be talking to them about their needs and how the region could support them.